Source: Radio New Zealand
Generic image of insurance, homes, houses. 123rf
From house insurance to health insurance, mortgage to pet to funeral, the list of what can be insured seems to be growing. Insurance experts list the ones you can cancel.
As the cost of insurance balloons to more than $16 billion a year, more New Zealanders are taking money-saving risks by cutting cover on their homes and resorting to self-insurance.
Consumer NZ’s head of investigations Rebecca Styles says its annual surveys show people are increasingly dropping insurance altogether because they cannot afford to pay the premiums.
She says most worrying is the decision to cut house insurance. The number of house insurance policy holders who cancelled their policies has risen from seven percent in 2022 to 17 percent last year.
“We’re still crunching the number for the 2025 survey but I wouldn’t be surprised if that goes up a little bit again,” she says.
Extreme weather events drove a sharp increase in premiums in that time, but for that very reason dropping the insurance is a “huge risk”.
Today, The Detail looks at the steps people are taking to tackle soaring premium costs.
Figures from the Insurance Council show that the amount New Zealanders spent on insurance has jumped from $6.9 billion in 2020 to $10.7b last year.
On top of that are life and health insurance, which together rose from $4.58b to $5.73b in the same period, according to the Financial Services Council.
“Where does it all stop? How many costs in my life are taking a gamble on the what-ifs,” says Bianca Russell, who spends hundreds of dollars every month on several insurances.
Former hocky Olympian Bianca Russell spends hundreds of dollars every month on several insurances. Kelly Wilson
The 47-year-old is a former hockey Olympian who lives in Auckland on a middle management salary. She says her previous career in top level sport and her current high-risk, expensive hobbies mean she needs the cover.
But a closer look at her premiums before her interview with The Detail gave her a shock, she says.
Russell jokes that she’s permanently broke because of her “bougie lifestyle” but she’s very happy to keep paying insurance because she doesn’t want to be a burden to her family.
Overall, insurance has had the largest price rise of any item tracked in the consumer price index since 2000, but Styles says health insurance is one of the biggest concerns as premiums have shot up in the last year.
Stats NZ data shows that health insurance premiums, as measured in the consumer price index, were up almost 20 percent year-on-year in September and more than 200 percent over 15 years.
While Consumer NZ’s surveys show the number of people dropping their house insurance has risen to 17 percent, the Insurance Council says its own figures show that figure is four to six percent and that roughly 95 percent of homeowners retain house insurance.
Chris Walsh of the MoneyHub research website says people need insurance now more than ever because of climate change, and worries about the health system, but many are over or under-insured because they don’t understand their policies.
He’s also seeing a trend in ‘self insurance’.
“Self insurance is popular and I’m seeing it more and more … [with] health insurance for older New Zealanders. They are being faced with quite large bills once they reach 70, 75 and they look at that and they think actually if it’s a $10,000 renewal fee, or a $15,000 to $20,000 [fee] for a couple, [they would rather] take that money, cancel the policy and put that money aside.
“I certainly wouldn’t recommend people self insure a house … and the same with travel.”
MoneyHub’s website has a list of five insurances you don’t need, which Walsh says upset some people when it was first published in 2019 – but he still backs it.
“One of those was pet, it depends on the pet. Look we got a bit of backlash on this but I’ll stand by it because it is true.”
Also on this list: “certainly funeral [insurance] and certainly things like life insurance when you just don’t have the risk,” he says.
Both Styles and Walsh say they are not financial advisors and they recommend people with a range of insurances get expert help.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
